Feedback on potential 16-unit purchase

[Chase Maher]

What's up BP!

I have the opportunity to partner 50/50 on a 16 unit purchase in Norfolk, Va with a friend and fellow investor. My skillset and experience is 95% residential, so I am hoping to get some feedback and opinions here. The deal, prior to inspections, is very solid on paper, in my own opinion (I am from there) and the opinion of a friend who is a top commercial agent in the area.

Details:

$750,000 PP

Seller financing 5.5% (Interest Only for 10 years, total note 30)

30% Down **

Current NOI is 52k

We could get the NOI to 60k right away with a $50 per unit rent raise as they are underpriced quite a bit at the moment. Plan is to make improvements in the 50k range and raise over the course of 6 months to an avg rent that would bring NOI to 72k and then re-fi. All tenants are month to month, so raising the rents is a bit easier and then lock in 1 year leases.

There are some bonus opportunities i.e. spreading water bills to tenants as well as airbnb opportunities in 2 of the units as it is on the water, but we are not factoring that in right now.

My questions:

We have the seller financing option, and the ability to do private for the 30% down second at 8-10% and 2 points. The total debt service would be basically a wash with current NOI, and cash flow would be low even with the higher NOI, but it'd be 100% OPM. What do you think about this strategy?

Is there a concern with a market shift and a deal like this, wanting to re-fi in 12 months or so to pay off the debt, lock in better rates and begin cash flowing at approx a 9.7% cap and the local market avg is 6.5-7%?

Thanks in advance and I am hoping the replies open up more questions and feedback.